How poor students get soaked for college sports

Liberty players celebrate at mid-court after defeating Charleston Southern 87-76 in an NCAA college basketball game in the championship at the Big South Conference tournament on Sunday March 10, 2013 in Conway, S.C.

As parents and students struggle to keep up with rising college tuition and take on greater burdens of debt, universities are being challenged to justify the ballooning athletic fees they tack on to the bill.

In the 2010-11 academic year, the 227 public institutions in Division 1 of the National Collegiate Athletic Association collected more than $2 billion in athletic fees from their students -- or an average of more than $500 per enrollee -- according to research by Jeff Smith at the University of South Carolina Upstate.

These fees, which can exceed $1,000 a year, are often itemized as a "student activity" or "general" expense. That may explain why separate research, by David Ridpath of Ohio University, found that students were only dimly aware of the extent of the fees, and weren't pleased once they found out how much they were paying.

Worse yet, institutions with high proportions of poorer students carrying substantial education debt appeared to be charging the highest fees. While all students must pay the costs of maintaining athletic programs, few actually benefit from the services they subsidize. In this sense, the fees are comparable to a regressive tax -- and one that is more onerous for lower- income students than for the more affluent, who are able to attend schools where athletic fees are lower.

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For the six public schools in the Big South conference, Smith shows that the average athletic fee was $1,512, about 25 times more than the average $61 paid by students at the Big Ten conference schools. Dan Garrett, my assistant, showed that at schools belonging to the five conferences with the highest athletic fees, more than 60 percent of the students received federal loans, and more than 36 percent received Pell grants. At schools belonging to the five conferences with the lowest fees, 41 percent of students received loans, and 23 percent had Pell grants.

Moreover, the schools in low-athletic-fee conferences typically had better academic reputations, mostly in the top one-third in Forbes magazine's ranking of 650 colleges and universities; the high-fee conferences schools were typically below average in those rankings. The low-fee conference schools included Stanford, Duke, Northwestern, the University of California at Berkeley, the University of California Los Angeles, as well as the highly ranked state universities of Michigan, North Carolina and Virginia. By contrast, the very high-fee Big South conference schools included small to midsized state institutions, such as the University of North Carolina at Asheville or Radford University and private, religious- affiliated ones such as Liberty University and Presbyterian College.

The low-fee conferences feature powerhouse football and basketball teams -- at schools with athletic budgets often exceeding $100 million -- that generate huge ticket and television revenue to defray costs. By contrast, at the Mid- American conference schools (where the average student athletic- fee subsidy was $831), sports budgets were typically about $20 million to $25 million, and were funded through subsidies that often exceeded $15 million per school.

None of this would matter as much if students were affluent, enthusiastic about collegiate athletics and willing to pay for high-quality sporting entertainment. Yet Ridpath's study shows that this may not be the case for the 275,000 students of the Mid-American conference schools.

For starters, about 41 percent of respondents either didn't know, or were highly uncertain about, whether they paid the fees. The students said they might be willing to pay more for services such as student centers and health care, though, on average, they favored sharp reductions in the cost of intercollegiate athletics. The vast majority of students, 72 percent, said athletics had an "extremely unimportant" or "unimportant" part in their school choice or as a priority for their student fees; less than 10 percent ranked the athletic programs as "important" or "extremely important."

At Mid-South conference schools, most students don't graduate in four years. Let's assume that student athletic fees average $1,500 and are paid for five years: They would amount to $7,500 over the college career, compared with zero for non- intercollegiate athletic schools or perhaps $300 in the Big Ten.

Such fees could increase the level of student debt in the Mid-South schools upon graduation to $32,500 from $25,000, or about 30 percent. More typically, the incremental debt burden associated with intercollegiate athletics is probably closer to 10 percent, still a consequential amount.

University trustees, who are often alumni themselves, seem to view intercollegiate athletics as a way to generate school pride. Funding these programs with fees may please influential sports fans, but it often ignores the wishes of the students themselves. And more spending on sports doesn't necessarily confer greater prestige. The University of Chicago, Harvard University, the Massachusetts Institute of Technology, Emory University and Washington University in St. Louis are doing just fine.

Richard Vedder, a contributor to Bloomberg View, directs the Center for College Affordability and Productivity, teaches economics at Ohio University and is an adjunct scholar at the American Enterprise Institute.